The Burj Dubai, the tallest tower in the world. Photograph: Ahmed Jadallah/Reuters

One thing confused me about the headlines this week, which were essentially a morality tale about the loneliness of the professional politician. Why did Liam Fox choose Dubai for his mysterious stopovers between London and Afghanistan? Why couldn't it be somewhere else, perhaps the Wembley Plaza Hotel in Middlesex? Four times in 18 months the former defence secretary laid his head there, when Bahrain, or maybe Oman, were the usual options. But it was Dubai, one of the seven emirates of the United Arab Emirates. Of all the slave states in all the towns in all the world, he walks into mine.

Fox is not alone. In 2010, over 700,000 British tourists stayed in Dubai's hotels, according to the Dubai tourism website. The British are Dubai's best customers, which exposes how much people will collude with, or ignore, evil if their hotel rooms are cheap, sumptuous and have cable TV. Virgin Holidays say on its website: "Dubai is like no other place on Earth. It is a truly fabulous destination where visitors can indulge in top-quality hotels, great shopping, fine dining, state-of-the-art spas and, of course, fantastic beaches. There is, however, more to Dubai than meets the eye …"

Yes indeed, it is unique, and there is more than meets the eye. That copy could be rewritten to say, "It is a truly fabulous destination where visitors can indulge in top-quality state censorship, great homophobia, fine misogyny, state-of-the-art police brutality and, of course, fantastic indentured servitude," and it would not be libelous – not in Britain, anyway. Dubai does not impose income tax, so the tourists are joined by an international convention of laughing parasites – all refugees from tax. I used to hate them, until I realised that any British people who want to live in Dubai, we can probably afford to lose.

I went to Dubai two years ago because a friend was going for work and I am not a woman to let a friend go shopping in a tyranny alone. I knew there would be trouble, reading the guidebook on the plane. Dubai practises religious tolerance towards all religions, it said – except Judaism. So I knew I shouldn't do anything explicitly Jewish in the UAE, such as complain about the racist cartoons of hook-nosed Jews sitting on the world as if it were a big space-hopper made of gentiles. UAE newspapers think all Jews look like Harvey Weinstein crossed with Shrek. But Dubai, owner of the Burj Khalifa, the tallest building – or spike – on Earth has worse to show us than some casual antisemitism.

Dubai, like the rest of the UAE, is a repressive state, hiding behind religious piety and that dreadful word glitz. If Mickey Mouse is in residence here, he has some of the smartest kids locked up in Space Mountain. Do not dare to be gay, or adulterous, or a democrat in Dubai. Homosexuality will get you up to 10 years in prison – party on, gays! A group of transvestites got five years in Abu Dhabi for dressing up; two lesbians got a month in Dubai, for kissing on the beach, before being spat out with deportation. I met a British woman in prison in Dubai. She was there for adultery, on the word of her husband – pale, thin, denied access to her children, almost too atrophied to speak. In the end, I didn't interview her. Appearing in the British media might prejudice her case, and, anyway, she had no words.

It is an authoritarian oligarchy; the face of its ruler, Sheikh Mohammed bin Rashid al-Maktoum, smiles from billboards and, sometimes, from our Queen's own carriage at Ascot. There is no press freedom in the UAE, just self-censorship. Insulting the royal family, or the flag, or possibly the architecture, will get you banged up. Everything gets you banged up in Dubai, except conformity and mindless shopping in the malls, one of which has a mountain in a fridge, which you can ski down – if skiing, rather than shopping in a tyranny, is your thing.

And in neighbouring emirates it is little better. Human Rights Watch is detailing the case of five Emirati reformers, all awaiting trial for talking about democracy. The attorney general, Salim Saeed Kubaish, says they are in prison for "instigation, breaking laws and perpetrating acts that pose a threat to state security, undermining the public order, opposing the government system, and insulting the president, the vice-president and the crown prince of Abu Dhabi".

One, Nasser bin Ghaith, an economist and lecturer at Sorbonne Abu Dhabi, managed to get a statement out from al-Wathba prison this month. "I have reached," he writes, "an unshakeable conviction that this court, measured against international norms of justice, is merely a farce and facade meant to legitimise and make credible verdicts and penalties that may have already been decided. It is purely an attempt to punish me and those with me for our political opinions." They will not get a fair trial.

And who built this city in the desert? There are 250,000 foreign workers in Dubai, drawn mostly from India and Bangladesh. They are indentured servants, that is, slaves. The usual way to recruit them is to draw them a picture of joy – great wages, fabulous working conditions – and charge them an enormous recruitment fee. Then, when they arrive, the construction companies often steal their passports, deny them their wages, and say they must work endlessly to pay for their return home, while living 10 to a room and working in the terrible heat. In Dubai, they cannot change jobs, and they cannot strike; those who do face violence, or deportation. Last year 113 Indians committed suicide in Dubai, or one every three days.

And there is no stopping. The recession is a blip as the UAE expands like an octopus. A vast project is afoot to create a new tourist paradise. Saadiyat Island in Abu Dhabi will be ready in 2020. The Louvre, which should know better, but doesn't, will have an annexe there; so will the Guggenheim, and so will New York – New York! – University.

We asked a Welsh couple why they came here. The answer arrived, from the man: the hotel staff would hold my dick if I asked. For me, that is not an advert, but others like to travel where labour is cheap and desperate and therefore loving. In my hotel they styled the ethnic minorities. African men carried my bag (my bag-carrier had a law degree), Bangladeshi men cleaned my room, and Thai women with false names – who can be bothered to pronounce a Thai name when there are so many of them? – served my dinner. These were human being beings acting as wallpaper.

It is almost understandable, if you are a psychopath. For every piece of human misery Dubai offers, it has a wondrous piece of leisure to distract you. This is, entirely, its terror. So there are buildings of incredible scope and ugliness, fake islands in the shape of continents, and the Burj al-Arab hotel, which is shaped like a sail and stuck above the Arabian Gulf.

This is all meat for gibbering travel PRs. There are many places on Earth as repressive, but North Korea and Saudi Arabia are not touted as dirty weekend destinations for residents of liberal democracies. Dubai is a place of horror, the land where fundamentalism meets hyper-capitalism. Could anything be worse? So again, Liam Fox, why?